Technology is disrupting traditional ways of doing business. For the real estate industry, innovations in virtual reality stand to bring big changes to the way consumers buy and sell homes. Here’s how VR is changing the real estate industry.
How VR is Changing the Real Estate Industry
Real estate is a business that is built on imagination. If a broker can portray what it would be like to live in a home, a potential buyer will begin to imagine themselves in the home. If it feels right, they will put in an offer. To accomplish their mission, brokers have many tricks of the trade. From writing compelling descriptions to using photo and video to bring the home alive, brokers aim to pull on emotion.
Now, virtual reality and augmented reality allow brokers to go the extra mile by really showing homeowners the potential of a property. Brokers can show how a new construction home would look when completed, down to landscaping and furnishings. They can use 3D to make a video feel immersive, rather than flat. Immersive virtual visits work like video walkthroughs, with the added bonus of three-dimensionality.
Gamification via apps can allow home or office space shoppers to interact with the space using their smartphones. This allows a prospective buyer, for instance, to virtually walk through the home to the outdoor patio, where they can enjoy the view. Since many people haven’t yet tried virtual reality, their first VR experience can be powerful.
Interactivity can be commercialized by, for instance, allowing customers to make changes to the home design as they use the app changes that are then worked up into a change order for custom built homes.
Approximately 1 percent of real estate brokerages have adopted VR or AR technologies. At present, the cost of implementing VR or AR is simply too high for most brokerages, except those that specialize in office buildings and luxury homes, including properties, still under construction.
As VR technologies become more widely available, more brokers can opt-in and the trend will begin transforming the industry. Estimates indicate that virtual reality will be worth $80 billion by 2025, with $2.6 billion of this representing real estate.
Advantages of VR in Real Estate
Photos of real estate listings simply do not tell the whole story. Agents commonly hear buyers say, “this doesn’t look anything like the photos.” Part of this may be due to the industry preference for wide angle photos, which make rooms appear larger than they are in life.
VR listings can recreate the accuracy of a listing compared with photos, to help buyers find the perfect property, making the home buying process simpler. Since a buyer can virtually visit several homes, they may not have to dedicate time to visiting properties until they know they are interested. From the buyer’s perspective, VR means they will save time while getting an accurate preview of properties they may be interested in. VR also makes it possible for them to walk through properties that are located in other states or countries, or that may not exist yet. With so many advantages, buyers may give business exclusively to brokerages that have invested in VR listings.
From a real estate agent’s perspective, VR has several key advantages too. The immersive experience and improved accuracy can lead to happier customers who are more likely to refer the agent to their friends and colleagues. Agents also save time when they aren’t conducting as many open houses or showings time that can be put to use following up with leads, listing more properties, or marketing.
Any new technology can give a real estate brokerage a competitive advantage over their peers, even if some of the traffic is just window shopping from consumers who want to see a VR listing. Brokerages who want to stay ahead of the curve should closely monitor the VR industry and adopt early.